The Hindu Business Line : Fertiliser forum not in favour of direct subsidies to farmers

For status quo: The Union Minister for Chemicals & Fertilisers, and Steel, Mr Ram Vilas Paswan (right), and the Fertiliser Secretary, Mr J.S. Sarma, during the inauguration of the second meeting of the Fertiliser Advisory Forum at Vigyan Bhavan in New Delhi on Wednesday. —

Our Bureau

New Delhi, Aug. 1 The Fertiliser Advisory Forum (FAF) has opposed Finance Ministry’s suggestion of giving direct subsidy to farmers and said that the present system should continue. The Forum consists of State Agriculture Ministers, members of the consultative committee attached to the Ministry of Chemicals and Fertilisers, representatives of farmers and dealers from each State and officials from leading fertiliser companies.

“The Finance Ministry’s suggestions of giving direct subsidy to farmers could have adverse affects and could lead to Inspector raj. The concept of having a direct subsidy in place is attractive to hear but its practical approach in the long term would be difficult to sustain.

“And because of this, the Forum has opposed the move of giving direct subsidy to farmers,” the Union Minister for Chemicals, Fertilisers and Steel, Mr Ram Vilas Paswan said during a press conference after the the second Fertiliser Advisory Forum meeting here on Wednesday.

The Minister added that the members decided that the present system of giving subsidy should not be changed as it could lead to losses.

The Union Finance Minister, Mr P. Chidambaram, in his Budget speech this year had said the Government intended to implement a pilot programme for providing direct subsidy to farmers in at least one district in each State. “While fertilisers should indeed be subsidised, we must find an alternative method of delivering the subsidy directly to the farmer,” Mr Chidambaram had said.

“When we are finding difficulty in providing ration cards and voter identity cards, the system of having smart cards for providing direct subsidy would be even more difficult,” Mr Paswan said.

The Minister added that while farmers would get the same amount under direct fertiliser subsidy, they would face administrative inconvenience in getting refunds.

“If farmers get more money, then I can understand that direct subsidy is beneficial to them. I suggest that there should be more discussions before a final decision is taken on the issue and today’s discussions would be conveyed to the Group of Ministers on fertilisers. The final decision, however, will rest with the Government on whether to implement direct subsidy or not.” .

Subsidy bill

Mr Paswan also said that the subsidy bill for this year was estimated at Rs 48,000 crore, including Rs 8,000 crore of last year’s arrears. “Only Rs 22,000 crore was provided in the budget, which will be sufficient till August end. The Department of Fertilisers is confident that the Finance Ministry will allocate around Rs 17,000 crore in the first supplement and the rest would be released subsequently, he added.

The Forum decidedto open primary stock points at the block level instead of district level, adoption of nutrient-based subsidy and introduction of water soluble fertilisers.

“Fertiliser consumption in the country is increasing every year but production levels are not growing in the same proportion. The nutrient price of nitrogen, phosphorus and potash should be determined on the basis of the existing price of these nutrients from straight fertilisers like urea, di-ammonium phosphate and muriate of potash respectively,” Mr Paswan said.

The Fertiliser Secretary, Dr J.S. Sarma,said tfertilisers would be distributed up to the block levelshortly.

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